The other problem with LIFO

Rebecca Sibilia / May 17, 2012

Guest blogger Rebecca Sibilia is the director of fiscal strategy for StudentsFirst.

School leaders in cities, school districts, and states across the country continue to grapple with revenue shortfalls that often require teacher layoffs.  Unfortunately, the impact of these layoffs is exacerbated when schools are required to use Last-In, First-Out (LIFO) policies, which require layoffs to be issued in the order of reverse seniority, because such rules mean more teachers, of all skill levels, will lose their jobs.

While the problems of quality-blind layoffs that force good teachers out of the classroom are obvious, the way these policies exacerbate the disruptive impact of teacher layoffs is also important. LIFO not only hurts students by firing newer teachers regardless of their performance, it also harms students and teachers by requiring that districts lay off a greater numbers of teachers than they would need to let go in a system that was based on performance.

A recent study in Education Next showed that only 16 percent of teachers laid-off under LIFO would also be laid-off in a system that uses performance, rather than seniority, as the deciding factor. Good teachers can be found at every level of experience. When districts make quality-based layoffs, we assume that an equal number of veteran and new teachers will be affected. Because teachers are typically paid based on their years of experience, this means that layoffs based on effectiveness will more likely produce savings closer to an

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The other problem with LIFO

Don't kick the pension can down the road

Chris Tessone / May 9, 2012

Rahm Emanuel, in his previous life as the President's Chief of Staff, famously said in 2008, "You never want a serious crisis to go to waste." Rahmbo and his home state of Illinois might want to take that advice as the Land of Lincoln's public pension system unravels at the seams. Rather than place their hopes in a failing system, public workers deserve a fundamental rethink of their retirement options.

Public workers deserve a fundamental rethink of their retirement options.

Gov. Pat Quinn has proposed a major reform, one radical enough to gain the approval of the Wall Street Journal editorial board. This plan simply hammers on workers and retirees, however, without improving portability of benefits or ensuring that young teachers get a fair chance at accruing retirement wealth. Illinois should consider 401k-style defined-contribution plans or cash-balance accounts instead of its legacy pension system for teachers.

Special interests predictably claim reforms cannot and will not save money due to transition costs, a fact noted by the University of Arkansas' Robert Costrell in a policy brief released today by the Laura and John Arnold Foundation. The Teachers' Retirement System of the State of Illinois makes just this claim.

Prof. Costrell's brief lays out in helpful detail why this isn't true, but the following graph tells the story succinctly, using California as an example:

It's clear that transitioning away from defined-benefit pensions plans can save money in the long run.

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Don't kick the pension can down the road

Smarter Budgets, Smarter Schools: How to Survive and Thrive in Tight Times

Chris Tessone / May 3, 2012

For school administrators and board members lost in the forest of books, reports, and briefs written on “doing more with less,” this outstanding volume provides a compass, map, and sturdy walking stick. Finance guru (and former superintendent of Arlington [MA] Public Schools) Nathan Levenson offers rational, honest, and tangible ways for cash-strapped district leaders to shed budget heft without compromising student learning. Guided by four principles—embrace “crazy” ideas, analyze details to make informed decisions, spend on what works, and align interests—Levenson explains how to manage even the most sacrosanct of education-budget items (all without the need for legislative changes or union approval). For example, district leaders should base funding on academic return on investment (A-ROI) determinations—cutting ineffective programs and beefing up those that see results. Take early investment in reading: In an average-sized elementary school (about 400 students), early reading intervention costs about $2,500 per child (and takes about three years to get struggling students up to grade level). Compare this with special-education referral and placement—which costs an additional $5,000 per year (for mild to moderately disabled students) and likely will last throughout the student’s K-12 career. This need to look beyond singular budget line-items manifests in staffing costs as well. Superintendents must think about fully loaded costs (salary plus benefits) when planning for personnel shifts—and must be willing to think creatively about how to fill certain

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Smarter Budgets, Smarter Schools: How to Survive and Thrive in Tight Times

Obama and Romney both wrong on student loan interest rates

Matthew M. Chingos / April 27, 2012

Guest blogger Matthew M. Chingos is a fellow at the Brookings Institution’s Brown Center on Education Policy. A version of this post originally appeared on the Up Front blog.

After months of the presidential candidates paying minimal attention to education, the interest rates on federal student loans emerged as a hot-button political issue this week. These loans play a crucial role in ensuring meaningful post-secondary opportunities for American students, both at Career and Technical Education (CTE) programs and four-year institutions, which is why it’s disconcerting to see both Barack Obama and Mitt Romney present proposals on this issue that may be good politics but are bad policy.

This week President Obama is heavily promoting his plan to keep the interest rate on one type of student loan in particular—new subsidized federal loans—at 3.4 percent. The rate will revert to 6.8 percent in July if Congress does not extend the temporary rate reduction that was enacted in 2007. Federal loans like these are an important source of financial support for community college students, a group Obama has portrayed as a priority for his administration. In 2007-08, 20 percent of full-time community college students received loans from the federal government, up from 12 percent in 1999-2000. This number has likely increased during the economic downturn of the last few years. At for-profit two-year colleges, 94 percent

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Obama and Romney both wrong on student loan interest rates